GM exits Venezuela after government seizes its factory

VALENCIA, VENEZUELA – General Motors announced Thursday that it was shuttering its operations in Venezuela after authorities seized its factory in the country, a move that could draw the Trump administration into the escalating chaos engulfing the South American nation amid days of deadly protests.

The plant in the industrial city of Valencia was confiscated on Wednesday as anti-government protesters clashed with security forces and pro-government groups in a country battered by economic troubles, including food shortages and triple-digit inflation. Three people were killed and hundreds arrested in the deadliest day of protests since the unrest began three weeks ago.

The seizure arose from an almost 20-year-old lawsuit brought by a former GM dealership in western Venezuela. The dealership had been seeking damages from GM of 476 million bolivars — about $665 million at the official exchange rate, but $115 million on the black market where many Venezuelans are forced to turn to sell their increasingly worthless currency. GM said it was notified this week that a low-level court ordered the seizure of its plant, bank accounts and other assets in the country.

Hundreds of workers desperate for information about their jobs gathered at the plant on Thursday to meet with government and military officials, as well as representatives of the dealership that brought the lawsuit. The neglected factory hasn’t produced a car since 2015 but GM still has 79 dealers that employ 3,900 people in Venezuela, where for decades it was the market leader.

General Motors’ announcement comes as Venezuela’s opposition looks to keep up pressure on President Nicolas Maduro, taking to the streets again Thursday a day after the biggest anti-government demonstrations in years.

It’s not the first time the Venezuelan government has seized a foreign corporation’s facilities. Last July, the government said it would take over a factory belonging to Kimberly-Clark Corp. after the American personal care giant said it was no longer possible to manufacture because materials weren’t available in Venezuela.

But the move against GM, the United States’ biggest automaker, was a much more powerful statement, and could lead to a further erosion of relations between the two countries. There was no immediate reaction from Washington or Venezuela’s government.

“This is a test case for Trump,” said Raul Gallegos, the author of a book on Venezuela and a Bogota-based analyst at Control Risks consultancy. “His response to a rogue nation taking over the assets of a brand name U.S. company will be indicative of the road it wants to take with Venezuela.”

The seizure came as tens of thousands of protesters demanded elections and denounced what they consider to be an increasingly dictatorial government. They were met Thursday by a curtain of tear gas and rubber bullets as they attempted to march to downtown Caracas.

Across the country, the clashes have been intense. Pro-government militias were blamed for two deaths, including that of a teenager in Caracas who was heading to a soccer game with friends. Overnight, a National Guard sergeant was killed and a colonel wounded when their squad was attacked with gunfire while trying to control disturbances in a city near Caracas, the chief prosecutor’s office said.

The three deaths bring to eight the number of people killed since protests began three weeks ago over the Supreme Court’s decision to strip the opposition-controlled Congress of its last remaining powers, a move that was later reversed amid a storm of international criticism.

As protesters, their eyes red and burning from tear gas, headed home, the opposition called for another round of street demonstrations Thursday.

“If today we were millions, tomorrow even more of us need to come out,” said opposition governor and two-time presidential candidate Henrique Capriles, who last week was barred from running for office for 15 years.

The Supreme Court’s decision has energized Venezuela’s fractious opposition, which had been struggling to channel growing disgust with Maduro over widespread food shortages, triple-digit inflation and rampant crime.

Opponents are pushing for Maduro’s removal through early elections and the release of scores of political prisoners. The government last year abruptly postponed regional elections the opposition was heavily favored to win and cut off a petition drive to force a referendum seeking Maduro’s removal before elections late next year. The opposition sees the government measures as turning Venezuela into a nearly full-blown dictatorship.

But the government hasn’t backed down.

Maduro, addressing supporters Wednesday at a much smaller counter-march of mostly state workers, said he was “anxious” to see elections take place sometime “soon” and repeated his call for dialogue, something many in the opposition see as a stalling tactic.

“Today they attempted to take power by force and we defeated them again,” said Maduro, adding that authorities had rounded up several armed opponents seeking to carry out a coup.

He didn’t provide any evidence to back up the coup claims, and the opposition rejected them as desperate attempt to intimidate Venezuelans from exercising their constitutional right to protest.

As tensions have mounted, the government has used its almost-complete control of Venezuela’s institutions to pursue its opponents. On Wednesday alone, more than 500 protesters were arrested nationwide, according to Penal Forum, a local NGO that provides legal assistance to detainees. It was unclear how many people remained in custody on Thursday.

Foreign governments are also warning about the increasingly bellicose rhetoric coming from the government. The U.S. State Department said those who commit human rights abuses and undermine Venezuela’s democratic institutions would be held accountable.

“We are concerned that the government of Maduro is violating its own constitution and is not allowing the opposition to have their voices heard, nor allowing them to organize in ways that expresses the views of the Venezuelan people,” Secretary of State Rex Tillerson told reporters on Wednesday.

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